A. Field of the Invention
My invention relates to calculating devices and, more particularly, to a new and novel device for calculating the intrinsic, fair and proper value of real and financial assets according to predetermined mathematical relationships or formulas embodied in the device.
The invention may take any of the common forms of a calculating device such as a linear sliding calculator, a slide chart, a rotary disc calculator, or any combination of these.
B. Description of the Prior Art
It is generally not difficult to determine the current market price of either a real asset (such as land, buildings or used machinery) or a financial asset (such as common stocks, bonds or warrants). The owner or potential buyer or seller of an asset can generally refer to recent transactions in identical or similar assets to ascertain the probable market price of the asset in question.
However, it has been very difficult to determine the intrinsic, fair or proper value of an asset, as distinguished from the current market price; yet, such a determination is necessary in order to determine whether the asset is overvalued or undervalued in the marketplace. An asset is overvalued when the current market price is higher than the intrinsic, fair and proper value. An asset is undervalued when the current market price is lower than the intrinsic, fair and proper value.
Heretofore, asset owners have been limited to using the current market price of an asset in relatively simple calculating devices primarily designed to calculate dividend or interest yields, price to earnings ratios, and gains or losses from historical purchase price to current market price.
For example, U.S. Pat. No. 2,572,531, issued to Steinkoenig on Oct. 23, 1951, teaches a slide rule used to calculate dividends on deposits in savings accounts for various periods of time. U.S. Pat. No. 3,209,999, issued to P. R. Carney on Oct. 5, 1965, teaches an analyzing instrument for calculating the price to earnings ratio and the dividend yield of a stock given the current market price, earnings and dividend of the stock. U.S. Pat. No. 3,711,014, issued to J. A. Tucker on Jan. 16, 1973, teaches a record keeping and stock value calculating slide chart for calculating the total current market value and gain or loss from total historical purchase value to current market value of a portfolio of securities, given the current market price of each security.
As can be readily seen, prior art has dealt only with the current market prices of assets and various common calculations related to dividend or interest yield, price to earnings ratios, and gains or losses from historical purchase prices to current market prices. The need is great for my new and novel calculator which provides the asset owner, buyer or seller with the intrinsic, fair and proper value of the asset and, by comparison to the current market price of the asset, a measure of the amount by which the asset is overvalued or undervalued in the marketplace. The current market price of the asset is of incidental or no importance to the calculation of the intrinsic, fair and proper value.